Revenue Management Tactics for High-Demand Event Pricing: From Local Events to the 2024 Paris Olympics

Uvika Wahi

Revenue Management Tactics for High-Demand Event Pricing: From Local Events to the 2024 Paris Olympics

In short-term rental management, the difference between a good year and a great one today often hinges on the ability to leverage local and global events to drive profitability. From the grandeur of the Olympics and the adrenaline-pumping action of the Super Bowl to the star-studded concerts of Taylor Swift and Beyoncé, and even more regional events, professional managers everywhere are capitalizing on the buzz these occasions generate within their markets. But what strategies are they employing to maximize their earnings? And more crucially, what common pitfalls could be silently eroding your potential profits?

Event-Based Revenue Management: Insights from the 2024 VRMA European Conference

The 2024 Vacation Rental Management Association (VRMA) European Conference, set against the backdrop of Paris’s historic Montparnasse district at the elegantly renovated Pullman hotel, is poised to peel back the curtain on these very questions. After a hiatus of five years, the conference returns not just as a gathering but as a beacon of insight, particularly through its standout session: “Revenue Management for Events: From Local Events to the 2024 Paris Olympics.” This session delivered on its promise to be an indispensable resource for short-term rental hosts and property managers eager to navigate the complexities of event-based revenue management with finesse and acuity.

With industry experts like Elise Ripoche, founder of J’affiche Complet, and Thibault Masson, Head of Product Marketing at PriceLabs and Founder of Rental Scale-Up, leading the discourse, participants gained access to a wealth of knowledge grounded in proven practices and innovative strategies. 

This article distills the essence of their insights, offering you a roadmap to not only avoid common missteps in event pricing but also to identify and exploit opportunities presented by both marquee events and under-the-radar local happenings.

Common Mistakes in Event-Based Pricing and Revenue Management

Short-term rental owners and management companies often face unique challenges when it comes to pricing and revenue management, especially in the context of local and large-scale events. Understanding these common pitfalls can significantly impact the success of your short-term rental business. Here’s an overview of the mistakes that could be affecting your bottom line:

Olympics & Large Events:

  • Overestimation of Potential: Expecting too high a demand can lead to setting initial prices too ambitiously, resulting in last-minute price reductions to fill vacancies.
  • Ignoring Opportunism Among Individuals: As the event date nears, the market sees an influx of listings from individuals trying to capitalize on the demand, often with unreasonably high prices, which can destabilize the market.
  • Late Listings Perform Poorly: Listings created specifically for a major event or just before it are less likely to perform well due to lack of reviews, lower visibility, and trust among potential guests.

Small Events:

  • Missing Optimal Dates & Booking Trends: Failing to track and anticipate booking surges tied to smaller, local events can lead to missed revenue opportunities.
  • Not Leveraging Guest Insights: Overlooking the importance of asking guests about their reasons for visiting can prevent hosts from identifying potential events driving demand.
  • Underestimating Events Without Data: Dismissing the potential impact of an event without analyzing market data can lead to underpricing and lost revenue.
  • Overreliance on Luck or Personal Knowledge: Depending solely on personal experience or intuition, rather than data, can result in missed opportunities and misaligned pricing strategies.

Optimization Levers

To avoid these common mistakes, here are some optimization levers you should consider:

  • Beyond Price Optimization: While important, do not focus solely on price. Consider optimizing for length of stay, which can attract a different guest segment and increase occupancy.
  • Neglecting Other Levers: Ensure a comprehensive approach by managing cancellation policies more strictly, utilizing platform-specific boosters, and offering promotions to increase visibility and attractiveness.

Is Imitating Hotel Practices a Mistake?

  • Hotels and Blackout Dates: Hotels often reserve blackout dates for direct bookings, reopening inventory later. This practice may not always translate well to short-term rentals, given the different market dynamics.
  • Safety Allotments: Hotels maintain a safety allotment amidst pre-existing bookings, a practice that might not be feasible or necessary for individual short-term rental properties.
  • Unexpected Releases: Even hotels can face surprises, as seen in Lille when 2,000 nights were released because the Olympic team chose to stay in Paris instead. Such instances underscore the unpredictability of event-based demand.
  • Reevaluating Hotel Expertise: It’s crucial to understand that not all hoteliers excel at revenue management. Some are overwhelmed and manage revenue themselves, which can lead to suboptimal outcomes.

Large Event Examples: The 2024 Olympics in France and More

The anticipation of major events such as the 2024 Olympics in France brings both excitement and uncertainty for short-term rental owners and management companies. Below, we provide analysis of the potential impacts these events could have on the short-term rental market, drawing from examples like the 2024 Olympics and the Super Bowl in Las Vegas, drawing on data acquired through PriceLabs’ Market Dashboards.

Olympics & Event Uncertainty:

  • Lack of Historical Data: The absence of historical data for reference the Olympics introduces significant uncertainty, making it challenging to forecast demand and setting optimal pricing. strategies due to.
  • Price Holding Strategy: For large events, such as concerts or festivals, the norm is to hold prices until the last minute. However, the unpredictable dynamics of the Olympics challenge this approach.
  • Demand & Market Dynamics: Concerns loom over whether demand will align with expectations, with the potential influx of new rental inventories disrupting established price norms through last-minute entries and discounts.
  • Booking Strategies: To mitigate the risks of a price war, it’s advisable to adopt less flexible booking conditions. Elise and Thibault recommend adjusting prices between 2.5 to 3.5 times the regular rates, though this may vary by city, property type, and range. Additionally, halting promotions, long-stay discounts, and employing blackout dates can help maintain revenue integrity. A trend towards increased length of stay during high-demand periods is also observed.

2024 Super Bowl in Las Vegas:

  • Big Event Fill Rates & Comparative Impact: In tourist-heavy areas like Las Vegas, big events like the Super Bowl may not significantly boost occupancy but can alter booking patterns, favoring longer stays and higher Average Daily Rates (ADR), for instance.
  • Super Bowl 2024 Impact: The event is expected to have a negligible impact on occupancy, similar to a busy weekend, but with a significant increase in ADR (2.3x) without an accompanying surge in occupancy. The trend towards longer stays around pre-Super Bowl events underscores the importance of avoiding one-night bookings during such periods.

2024 Paris Summer Olympics:

Paris Olympics 2024 Occupancy pacing at 2.5x year over year
Paris Olympics 2024 Average Daily Rates ADR up by 1.8x year over year
Paris Olympics 2024 length of stay and booking window trends
  • Paris Intra Muros: Occupancy rates are pacing at 2.5x year-over-year, with ADR increasing by 1.8x. The supply has seen a 1.3x increase from February 2023 to February 2024.
  • Saint Denis – Grand Stade: Demonstrates a more pronounced effect, with occupancy pacing at 7x year-over-year and ADR up by 2.6x. Supply in this area has increased by 1.8x from February 2023 to February 2024, with a smaller surge in longer stays compared to Paris intra muros.
Saint Denis Grand Stade Occupancy pacing at 7x year over year
Saint Denis Grande Stade Paris Olympics 2024 future prices
Saint Denis Grande Stade Paris Olympics 2024 length of stay and booking window trends

Next Key Dates for Short-Term Demand (2024 Paris Summer Olympics):

  • March 19/20: Draw for basketball/football tournaments.
  • March 23: Signing of the volunteers’ agreement.
  • Early May: Opening of the ticket resale platform.
  • May 8: Arrival of the Olympic flame in Marseille.

Key Facts at This Stage:

  • Length of Stay: Averages around 5 nights in Paris but only 2 nights in Lille.
  • Cancellation Policies: In Paris, non-cancellation policies are converting better than flexible rates.
  • Search Popularity: The highest search volumes are for Paris, followed by Nice, Marseille, and Lille.

How to Learn About Upcoming Local Events?

For short-term rental owners and management companies, leveraging knowledge about events can enhance occupancy rates, optimize pricing strategies, and improve guest experiences. Here are practical ways to stay ahead:

Revenue Management for Events From Super Local Events to the 2024 Paris Olympics

Guest Feedback:

Directly engage with guests to understand the purpose of their visits. This approach can reveal patterns or spikes in bookings tied to specific local events, allowing you to anticipate demand and adjust your offerings accordingly.

Local Government:

Establishing connections with town halls or local government offices can provide early notifications about community events, festivals, and public gatherings. Such information is crucial for planning and forecasting, enabling you to prepare for increased demand periods.

Networking:

Joining local commerce chambers, tourism boards, and hospitality groups offers insider knowledge on upcoming events and market trends. Networking within these circles opens up opportunities for collaborations and partnerships, further enhancing your market presence.

Business Connections:

Building relationships with real estate professionals, local businesses, and event organizers can offer insights into local market dynamics and upcoming events. These connections can provide a competitive edge in understanding guest demographics and tailoring your marketing efforts.

Online Engagement:

Actively participating in local event forums, travel websites, and social media groups dedicated to your area can attract potential guests looking for accommodations during specific events. This proactive approach not only increases your visibility but also positions you as a go-to resource for travelers.

Staff Insights:

Your housekeeping and maintenance staff can be valuable sources of information about local happenings, as they often hear about events from guests or observe trends in the community. Encouraging staff to share such insights can aid in planning and operational adjustments.

Data Analysis:

Utilizing tools like PriceLabs for data analysis and dynamic pricing can help track booking trends, identify demand surges related to events, and adjust pricing strategies in real-time. This data-driven approach ensures competitive pricing and maximizes revenue during high-demand periods.

What if there are no bookings as the event is approaching?

Not receiving bookings as a major local event approaches can be disconcerting for owners and management companies. Understanding the signals to adjust your strategy is crucial for minimizing losses and optimizing your occupancy rates. Here’s how to interpret the market and adapt:

Monitoring the Booking Curve:

There isn’t a universal timeline to start worrying about a lack of bookings; the key is to observe deviations from the typical booking curve for your market. Utilizing sophisticated tracking tools enables you to compare your booking pace with the norm, highlighting when adjustments might be necessary.

No Bookings, Yet Market Shows Activity:

If you notice your property isn’t booking while others in the market are, it could signal that your pricing strategy is overly ambitious. Being priced slightly above the market average can be strategic, but a significant disparity may necessitate a reevaluation of your pricing model. It’s essential to strike a balance between competitive pricing and profitability.

Reassessing Your Strategy:

An absence of bookings, despite a high-price strategy, indicates a need for strategy recalibration. It’s critical to analyze your marketing efforts, pricing, and the unique selling propositions of your rental. Aligning closer with market trends and guest expectations can help regain traction.

No Bookings Aligned with Market Trends:

If the wider market is also experiencing a slow-down, it might be too early to judge the effectiveness of your strategy. Factors such as seasonal trends, unexpected events, or market saturation can temporarily impact bookings. However, staying informed and ready to pivot is vital.

Caution Against Premature Optimism:

Leading the market in terms of lower prices or higher occupancy too far ahead of an event might not always be favorable. It could indicate underpricing, potentially leaving revenue on the table. Regularly reviewing your pricing strategy against market performance ensures you’re not undervaluing your offer.

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